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Diesel Import From India Using Pipeline: Deal To Be Signed

Mhabub Roni

The government has finalized the plan of importing diesel from India through pipeline. Using this pipeline Bangladesh will be importing diesel for next 15 years and the final deal regarding this import is expected to be signed within short time.

Department of Energy and Mineral Resources and Bangladesh Petroleum Corporation (BPC) sources has informed that, Bangladesh is likely to import 2.5 lac metric tons to 4 lac metric tons of diesel from India using this pipeline.

A Memorandum of Understanding (MoU) has been signed between Bangladesh and India regarding this diesel import after conducting a thorough feasibility study. The oil will be imported from the Numaligarh Refinery situated at Asam, India.

A pipeline having a length of 130 kilometer will be constructed stretching from Numaliarh to Parbatipur oil refinery, Dinajpur. Only 5 kilometer of the pipeline will be in the Indian Territory while rest of the line will in the Bangladeshi land.

According to the related sources, 2.5 lac metric tons of diesel will be imported for first 3 years after the date of final deal signing. For the following 3 years the amount will rise up to 3 lac metric tons which will finally rise up to 4 lac metric tons of diesel in the rest 9 years.

On 23 August, this year the cabinet committee on procurement has approved the proposal of importing diesel from Numaligarh using pipeline. The premium (transportation) cost is estimated as much as 5.5 USD for per barrel (approximately 159 litres). However, Bangladesh currently spends only 2.2 USD for importing per barrel of diesel.

Regarding this cost issue, a BPC official said that, the conventional imported diesel is usually received at the Chittagong port. The cost of transporting this imported diesel to the northern part (Dinajpur area) of the country is about 4.4 USD per barrel. So the total cost of supplying conventional diesel to the country’s northern part is 6.6 USD per barrel, which suggests that, importing diesel at 5.5 USD from India will be beneficial. Another official of the BPC said that, premium is usually defined by considering the transportation cost and vaporizing effect of the oil. However, adjusting the premium considering the internal transportation cost is not logical.

BPC chairman Abu Hena Md. Rahmatul Munim said that, necessary steps are taken to import diesel from India. BPC director (Operations and Planning) Sayed Mohammad Mozammel Haque said that, the deal expected to be signed within this September.

One of the official of BPC said that, initially the government planned to import 10 lac metric tons of diesel from India. However, Bangladesh has now changed its stance. India has proposed to invest 303 crore BDT in to construct the pipeline as most of the part will be in Bangladesh’s part. However, BPC has decided to construct the Bangladeshi part and Indian Petroleum Corporation will construct rest 5 kilometer long pipeline, which will be in their territory.